Roll Call: Antitrust hawks, restaurants want to rein in food delivery apps

August 11, 2020 Media

An online campaign that antitrust advocates are unveiling Tuesday will seek to limit the market power of online delivery apps like Grubhub Inc. and Uber Eats by getting local and state governments to limit the fees and commissions the apps can charge.

The campaign, which also targets Postmates and DoorDash Inc., accuses the companies of using anti-competitive and predatory business practices during the COVID-19 pandemic to exploit restaurant owners and their employees — millions of whom are out of work — for profit while draining revenue from local economies, even as the food industry stands to lose $240 billion by the end of the year.

Led by the American Economic Liberties Project, a group that favors tough antitrust regulation, the campaign aims to help local business owners organize a push for local and state government action. The AELP is funded by foundations and individuals. Restaurants from around the country are involved in the campaign, including Washington establishments like Fiola Mare, Brasserie Liberté, and Ivy & Coney.

Prior to the pandemic, restaurant owners viewed the apps as a worthwhile investment even if it meant suffering losses due to commissions because takeout and delivery services were not a foundational aspect of their business models, Maureen Tkacik, a senior fellow at the American Economic Liberties Project, told CQ Roll Call.

“But when the pandemic hit, suddenly these companies that control the delivery and takeout business became their only possible source of revenue,” Tkacik said. “Immediately, it took a hard situation in which restaurants were guaranteed to lose money and it turned it into a situation that was completely impossible.”